Archive · 18 Jul 2025
India Doubles Rice Sales for Ethanol, Sparking Debate
India is using more rice to make fuel, which is controversial.
The government is allowing more rice from the FCI to be used by ethanol plants.
Rice production has gone up, but critics say using rice for fuel is a bad idea.
The government buys rice at a high price and sells it cheap to ethanol plants, which costs taxpayers money.
The OMCs are required to buy the ethanol at a price set by the government.
It's argued that this may not be the best way to make fuel, and using things like leftover crop parts could be better.
India has doubled the amount of rice the Food Corporation of India (FCI) can sell to ethanol distilleries.
The Agriculture Ministry estimates rice production at 149 million tonnes for 2024-25, up from the previous two years.
FCI is selling rice to ethanol plants at ₹22.5 per kg, far below the procurement and storage cost.
Oil Marketing Companies (OMCs) are required to buy set quantities of ethanol at government-set prices.
Second-generation ethanol projects that use crop residue may be more sustainable.
- Who
- The Indian government, Food Corporation of India (FCI), and Oil Marketing Companies (OMCs).
- What
- The Indian government is increasing the amount of rice used to make ethanol.
- When
- The decision was made recently, and the article was published on July 18, 2025.
- Where
- India.
- Why
- To meet fuel blending targets and encourage the ethanol economy, although it has some drawbacks.
Concerns regarding the policy
Government's viewpoint
Economic Viability
Concerns regarding the policy
Using subsidized rice for fuel is financially unsustainable and relies on government subsidies.
Government's viewpoint
The ethanol program encourages the ethanol economy, and ethanol units need predictable feedstock availability
Consumer Impact
Concerns regarding the policy
Diverting rice could hurt consumers and public nutrition programs.
Government's viewpoint
Diversion of excess rice doesn’t harm consumers or the poor
- Rice production forecast
- 149 million tonnes (2024-25)
- FCI rice stocks
- 37 million tonnes (June 2025)
- FCI selling price of rice to ethanol plants
- ₹22.5 per kg
- FCI procurement and storage cost of rice
- ₹41.73 per kg
- Ethanol purchase price (OMC)
- ₹57.9 per liter